The Top Five Stocks Of 2024

If you've invested well in 2024, your portfolio has done well. In fact, a lot of our portfolios have done well. So it's great to know that the market's going up. Many of us are reaching all new highs with our portfolio and investing. This is what investing's all about. It's about the bull markets, the times where stocks go up, where we make money, where we make progress. But over this market over the past 12 months, there have been some companies that have done a

bit better than the rest. There's some that have done exceptionally well. And today we're going to be looking at five of them, five of the best performing stocks in 2024. And what made these stocks go so nuts, what made these stocks just explode in 2024? And we're going to be going over all five of these stocks that have gone up hundreds of percentages. Now, we also have a bunch of other news to get to. It's been a very busy week. Spotify reported their earnings.

They blew away their expectations. The stock is up huge this year. We're going to be looking at this one and why I still think that Spotify is a decent bet. Apple's next big device, an AI wall tablet. Will this be successful? We'll be discussing. Amazon just debuted their new competitive storefront to TAMU and Sheen. It's called Amazon Hall. We'll be taking a look at it here. And tomorrow morning, we have Disney reporting earnings. I'll be going over my expectation of what I think will

happen with their earnings. Now we start off with

20/24/2024. So far has been an incredible year for the market. There's been opportunity, opportunity to make a lot of money. If you're not making money in this market, you're doing something wrong. It's not the market's fault. It's not other investors fault. You're doing something wrong if you're not making a lot of money because there has been ample opportunity. The major indices are up mid 20

percentages. That's good in and of itself, but there's been many even better opportunities with individual companies. Now. I've had a great year between both of my portfolios. I have a list of companies I consider big winners this year. Holding on to Texas Roadhouse all year long has been a great decision. It's up around 67%. Buying more into Netflix at the start of the year has been one of the better decisions I made. That one's up close to 80% this

year. Buying into Booking Holdings has also worked out really well. It's surging to all time highs. Even Salesforce is now surging to all time highs. So I have a list of companies that I've made big concentrated bets into and I'm proud of the way that they've turned out. They've performed really well so far, but they're not the very best performing in the market and that's rarely the case.

As an individual stock picker, you can't expect to pick the best stocks in the market every single year. That's just a bit unrealistic. But the stocks that we're going to highlight here are five of the best performing stocks in the entire world. The first one we're going to go into is CAVA. This is one that has been a shockingly good performer. Now this is in my wheelhouse. I cover quick service restaurants. I invest in quick service restaurants.

I made a bunch of money investing in Chipotle for a relatively short amount of time. Kava's one that I always looked at when I was covering Chipotle. It was a company that I saw as a smaller competitor. But Kava lacks scale. It's not a highly scaled company. It's a little bit more of a newer company, but they are rapidly expanding now. The share price here has increased by 295% year to date. In 2024, it's gone up nearly 300%. What is CAVA doing?

What is going on here? The CEO of CAVA was asked about the surging stock price. What do they think of it? They're watching the stock go up 300%. What is his thoughts? We tell the team stocks are going to go up and down every day. And the the night before the IPO actually said to the team, look, this is not the destination. It's the next chapter in our

journey. And if we keep our heads down, focus on our mission to bring heart health and humanity to food, that over time that stock price will go up and it will take care of itself. That's a very mature answer. Don't focus too much on the stock price, focus on the business and the fundamentals. But secretly he has to be very happy that the stock is up 300%. That's something to celebrate. Now, for those of you that may not be aware, Cava is a

Mediterranean food company. They sell the Mediterranean bowls, so they're like another healthy bowl company. There's a number of them, and there's questions as to why Cava demands such a high valuation. The company's currently at an $18.4 billion valuation, and they're only doing revenues of around 900 million. So the price to sales is 20 for COPPA, a price to sales of 20. If we look at this compared to Chipotle, which is not cheap, Chipotle's not cheap.

I sold the company because it was too expensive. The price to sales for Chipotle is 7.5 S Consider the fact that I sold Chipotle believing that it's more on the expensive side of things and it's trading at a price to sales. That's 1/3 of COPPA. Cava's not just expensive, it's extraordinarily expensive when you consider almost any piece of data. It's expensive on a store basis. A normal Chipotle store on average is around $12 million.

Cava's are now being valued at around 30 plus $1,000,000. To justify a 30 + 1,000,000 dollar valuation per each cava location requires a lot of forward growth assumptions, and the CEO talks about his growth assumptions here. Our goal is 1000 restaurants by 2032, which basically implies a 15% plus compound annual unit growth rate. This year we've been able to exceed that a little bit. We raised our guidance to 56 to 58 new restaurants, so closer to

1718%. And we gave preliminary guidance for next year of at least 17% plus given the health and strength of our real estate pipeline. He said that his goal is 1000 restaurants, but when did he say that goal was for? Let me let me rewind there.

By 2032 which basically. 2032 so Cavas ambitious growth goal is to have 1000 locations by 2032. If we look at Chipotle as just a reference here again because the companies are very similar with the products they sell, Chipotle has a total location count of 3600. So by 2032, COV is projecting to have around 1/4 or a little bit more than 1/4 the locations of Chipotle, while it's around 1/4 the market cap. So what investors are doing here is pretty simple.

They're just projecting out Chipotle like growth over the next six or seven years. Now this may work for COV investors. I can see the logic here. They're just projecting that it will have the same success as Chipotle. Now, keep in mind, Chipotle has had astronomically good success. So you're benchmarking Cava today, pricing in the success of a company that's had

astronomically good success. Investors in Cava are convinced that this is the next Chipotle. Now, whether it turns out to be one or not, we'll have to wait and see. Now, moving on to the next one, we get to a stock that has had a rise that is truly striking. This is one of the most incredible performances of any stock of any year, and it's Carvana. Don't be fooled by it being down 1% on the day. Carvana is up 400% year to date.

That's correct, 400% flat. Now this is a stock that I have to rewind a little bit and give some perspective here. Carvana has done the EU turn. If we look over the past five years, you see they had an epic 2021 rise. It was in a bubble during that time period and then the stock came cratering down as they had really no cash flows. A lot of people thought they were going to go bankrupt.

I was amongst one of them that thought that this is a business model that strikes me as one that very well could go bankrupt. Not one that I think is predictable at all, but Carvana pulled it off. Their team really turned this thing around, which is incredible to see. It's doing a bit of 1/2 pipe formation here. I don't know if that's really a thing. I'm not a technical analyst, but it's surging back up to the price it was in 2021. So I look at a company like Carvana.

This is one that almost everyone just a couple years ago thought was going bankrupt. They thought it was a fake company. The thing that I saw highlighted time and time again were the vending machine for cars that Carvana built. These towers full of cars. This isn't just a concept. These are real. Carvana really built these. I have one in a neighboring city, and some of them, they have more stories than others.

They're taller than others. They're actually kind of cool, but it looks like a vending machine for cars. The company was crashing in 2022. A lot of traders made bets against the company that were successful. And there's a lot of talk about Carvana. The company's not even real that it's a fraud, that it's made-up, that their profits aren't real, but they are audited. And the company so far seems like it's making real money. The revenue has halted its

downward trend. It's now trending back upwards. The free cash flows also went from heavily in the red, losing billions of dollars per quarter, to now actually being positive on a free cash flow basis. They really turn this thing around. So how did Carvana pull this off? How did they go from being a company that lost money every single day, every month they're burning cash to now one that's profitable?

And especially how did they get to a point where their margins per car sale around double the average car dealership? And the CEO of Carvana was asked this very question, how are they so profitable? And he answers it here. About execution, your profit per vehicle. Gross profit per vehicle is greater than $7400, well above what analysts were expecting. $7400.00 of gross profits per vehicle, the most a car dealership tries to make.

It's like $2000 twenty $500.00. So Carvana is either doing something fraudulently or they figured something out. Sure. Well, I think you know, the fancy word we use for that is vertical integration. But I think you and most consumers go to a dealership and buy a car. You know, probably the car they're buying was was traded in at a different dealership. It was transported to an auction. There was an auction that made money. It was transported to a dealer. It sat there for a while.

The dealer made money. It was financed with a third party finance company. There's maybe 10 to 30 different software providers that are making money in the transit transaction. So there's a lot of, you know, hands in the transaction. I think what we've built over the last 11 years, a totally new system. Generally we're buying cars directly from our customers. We're doing all the work ourselves. We're selling it to our customers. We're the finance company. It's all our own systems.

And that means, you know, simpler experiences for our customers, It means a great deal for them and it means we have the opportunity to make more money. So it's a, it's a true win win. But it's it's been a lot of work to get to this spot and we're proud to see it showing up in the numbers. He doesn't duck this question, he just gave a very thorough answer as to why their margins are higher than the average car dealership. Now even with that answer, people are not so convinced.

A lot of people still stating that it's a fraud in the YouTube comments. The only comments that exist are accusing Carvana of being a fraud. But when I listen to the CEO's answer, to me that passes the smell test, I don't sense anything fraudulent about his answer. And in fact, I think it's just the most sensible answer. He explains that normal car dealerships are completely ineffective.

They're not efficient. There's lots of software, they're paying for different vendors, different lenders, all with different terms. The slowness of the entire process makes the whole ordeal more expensive, so car dealerships in the end aren't earning as much money as they could be otherwise. With Carvana, what they've done is they've basically removed a ton of middle men, making it so that they have more margins in the process. And this is the blueprint that many great companies follow.

They don't reinvent the wheel, they just do something in a more efficient manner. O When I look at Carvana, I think a lot of people are complaining that they missed out on the gains or the complaining that their short thesis isn't working so they just reverted to calling the company fraudulent with no evidence to back it up. But so far, what I see is a great recovery from a company that's finally proving its business model. And as a result, they're now up

400% year to date. An incredible thing to see. Now the next one is one that has gone up even more than Cava, even more than Carvana. Yes, more than 400% year to date. It's in fact gone up 600% year to date. It's called App Lovin. App Lovin is a company that I haven't heard too much about. I don't hear it discussed all that often, and I think part of the reason why is because the product they sell is rather

vague. Basically what they do is they help developers, specifically mobile developers, connect to customers. They basically just help them find customers and advertise. Now this is a market that was clearly underserved because app 11 went into this category and they helped game developers and specifically gaming apps make a bunch more money by finding different customers through AI. Now again, this stock is up 642% year to date.

Just just incredible. When we zoom out five years, this is also one that hasn't gone through a a big U-shaped recovery. It's had a little bit of one, but no, it's just up a lot this year. The company's simply growing and compounding almost in orders of magnitude. Now, when I was trying to search what App 11 actually does, I went to the website, I read about the products, and everything was described very vague and simple marketing terms.

We help you connect the customers, but what does that actually mean? Where I found the actual best description of what this company does is from the CEO himself in the earnings transcript. This is on an earnings call. If you're not aware, on Qualtrim, we have all the earnings calls of different companies. You just type in the ticker symbol, it brings up the quarters, and then you have the text format of what happened

here. When I read through the CEO here responding to a question, the question was basically, how are you guys different than The Trade Desk? The Trade Desk is a company that helps you sell advertisements, helps you set up advertisements and optimize them. App 11 seems like it does the same thing, but the CEO here outlines that they really don't, they're not doing the same thing because of key differences in their strategy, he says.

Yeah. I guess more specifically you're referencing Trade Desk versus our business models. Like it's just two different approaches to the market. They've targeted big agencies and taken a very smart software as a service type of approach and we've targeted brands and direct to consumer and e-commerce gaming game developers. And what these companies care about is not media dollars or percentage markups. They care about optimization and automated advertising to a

revenue goal. And that's really like what our systems predicated on is that we take all the risk on the media side. We have to deliver really compelling performance on the technology side. I guess like what's most exciting for me on what we've built and where we are in terms of, like you said, market cap on the scale of the Business Today is we're on top of 1.4 billion

daily actives. We've got the largest mediation solution in the sector and our teams have built maybe the most innovative advertising technology that the world's yet seen. And we're now scaling it out. And so if you're sort of just fast forwarding over the quarters and years from here, we're going to be able to offer services to 10s of thousands to hundreds of thousands to millions of advertisers on our platform to access this audience that they've never accessed before.

And now mobile devices, you think about four hours to five hours a day of time spent. This is a 45 minute component of that, four hours that is untapped for most of these advertisers. Our technology can now unlock it for them. There's the sales pitch for App Lovin. That's the reason that these

companies are using them. If you spent a bunch of time developing a game and you want to get exposure to it, you want to get people signed up to it and connect to customers, they're using artificial intelligence and using models that nobody else has access to, and they claim that their models are way more advanced than other companies. Other companies aren't even close, and that's the reason that they can offer these different type of payment plans that are based purely on performance.

So App Lovin has quickly raced up to a $100 billion company, now up 642% on the year. So I think this is one that deserves a bit more attention. Now. Next up, we have a stock that hasn't had quite the year that App Lovin has, but it's been a great year for Reddit. Reddit's a company that's rather new to the market and they're already up 160%. So Reddit investors are doing

great this year. When I look at Reddit overall, it feels like one of these companies that's been around forever but somehow is still not mature. For example, Reddit has been around for for at least a decade, maybe 1520 years, and it has a $23 billion market cap, making you believe that it's probably a mature company, probably generating steady cash flows. That's not really the case. the PE ratio is 224 because they don't generate really any earnings.

The free cash flow yield is negative because of course, they're, they're losing cash flow over the trailing 12 months. Now if we look at this, the cash flows are starting to head back up in the positive. It is $104 million. When we look at the free cash flow compared against the stock based comp. To generate this free cash flow, they have to dilute the investors like crazy. And this is something a lot of these companies try to pretend they're not doing.

They try to say that free cash flow isn't really cash. So you don't have to worry about that. Just put it out of your mind, don't worry about it. But that stock based compensation is a real expense to the shareholder. So the company is headed in a right direction, but it still feels like it has a long ways to go before it gets to that mature cash flow position. Now in terms of Reddit, qualitatively, I can see why The company's valued at $20 billion. It is a staple of the Internet.

It's always there in the Google search results. People look at Reddit as an authentic place to go amidst a bunch of AI results, so I can see it being leveraged and monetized over time. It doesn't sound crazy to me that investors are paying mid $20 billion for this stock. Maybe they'll be wrong, but if Reddit doesn't figure out how to make a lot of money, that's on Reddit's management.

Now finally we get to a stock that has rocketed up this year, especially with the news of a Trump victory. This one's really taken off in line with the price of Bitcoin. But even more, we have micro strategy. Michael Saylor pulled it off. He has pulled it off. He's really done it. Microstrategy's up 423% year to date. This company doesn't really make any revenue. I mean, it makes $100 million, but that's been flat for years and years.

It's not being valued off of the revenue it makes or the cash flows it makes. This is being valued off of their ownership of crypto. Basically, all that Michael Saylor has done is strategically taken out debt to leverage up on Bitcoin, and Bitcoin is the only thing that he buys. So whether or not he makes a fortune or whether or not he loses a fortune is simply based off the price of Bitcoin. Now I was warned about this. Michael Saylor did give us a

heads up after all. Here is a video of him explaining that this is going to happen which. One's the best crypto asset. Well, Bitcoin's the best crypto asset. OK, What's the second best? There is no second best. There's no second best crypto asset. There's a crypto asset. It's called Bitcoin, right? Right. There's no second best. OK. But take all your money, buy Bitcoin, then take all your time, figure out how to borrow more money to buy more Bitcoin.

Then take all your time and figure out what you can sell to buy Bitcoin. And if you absolutely love the thing that you're that you don't want to sell it, go mortgage your house and buy Bitcoin with it.

And if you've got a business that you love because your family works for the business that's in your family for 37 years, and you can't bear to sell it, mortgage it, finance it, and convert the proceeds into the hardest money on earth, which is Bitcoin. That was his advice years ago and I don't know why I didn't listen to him. Seems like a very trustworthy, not crazy person. But either way, he did warn us ahead of time.

If you followed his advice to just sell everything, everything that's important to you, just sell it and buy Bitcoin like a year ago, you'd probably have a lot more money than you do right now with your investing strategy. So just think about that. If you just only bought Bitcoin, you'd be doing better. Every time I look at this company with MicroStrategy and Bitcoin, I'm happy it's doing well. I have nothing against Bitcoin, but I still feel better about buying productive assets.

I don't like the asset that I hold, the value being determined by other people's ability to pay for it or not. In the case of crypto or Bitcoin, really any of them, that's most of the use case is simply a trading item, something that people buy. If they think it's going to go up, they think they're going to make money, they sell. If they think it's going to go down, they're going to lose money. None of it's based off of cash

flows. There's no business model, there's no product they're selling, they don't have employees, they're not generating net income. And I like that side of things. I like doing analysis on actual businesses, not on speculation on whether something is going to go up or down in value, but that's just a personal preference either way. Michael Saylor right now is making a. Fortune with Bitcoin and his stock micro strategy, which is leveraged Bitcoin of course, is

up 400% this year. So that wraps up five of the most explosive stocks of the year. Let's go ahead and move on to some news. Now the first bit of news we have is that Spotify just

reported their earnings and the stock is up big, up 12% after earnings. They beat on their subscribers. This one's also one that's doing fantastic this year, up 145% when we look at Spotify and what I see is a great company. I continue to see a great company. This is actually one that I held in My Portfolio for a short time. It's one that I, I really had a, a thought that this is going to be a great asset in the future.

It's going to be worth so much money because they have such a sticky product that it appeals to so many users, 600 million plus users, and they're continuing on. They just had another subscriber beat and the stock continues to compound. Mark Mahaney lays out what he sees as the biggest factors this quarter. Well, the six subscriber beat was, was nice. It was solid. It was somewhat modest though.

I, John, I think the real outlier here and why the stock's up 7% is we just got record high gross margins and the guidance it's 31%. This is a low gross margin business to begin with, but 31% gross margins, that's a record high and the guidance implies that it's sustainable, IE the next quarters gross margin guidance is kind of roughly in

line with this quarter. Like that's been the overhang issue on Spotify shares since their second area of this since their offering, since their, since their listing, you know, whatever five years ago, the business doubled in revenue, but gross margins never moved. The stock didn't work. Then when the gross margins moved the stock work. He got more evidence of it today. So I we continue to like the stock. So he continues to like the stock.

It's still one of his top picks even after the huge surge this year. And that is someone that doesn't have increasing bias. He's not concerned about taking gains. He's concerned about looking at the current valuation and what's going to drive the stock further in the future. Like I said, at one point I did have Spotify in My Portfolio, but I decided to move out of Spotify and put everything into Netflix because my opinion was that Netflix and Spotify are very similar, but Netflix will

have higher margins. They're a company that has more control over their margins because they make so much. Netflix made content. Most of the content on Spotify is owned by other people. It's owned by the music labels. So their margins have continual pressure.

Now Spotify continues to overcome these challenges of the lower margins by growing organically and doing things to adjust their margins upward even though they don't own their music, for example, they moved into podcast and they immediately begin to grow their podcast substantially. They brought on Joe Rogan, they brought on a lot of top podcast creators, but now there's such a big podcast platform. They don't need Joe Rogan. They don't really need these top

creators. They're just big in and of themselves without the draw of these top creators. So Spotify has moved into a category that's a lot higher margin with podcast. They also have some audiobook stuff they're doing, and they're pushing more advertisements to have a little bit better deals with the music labels. And I think this is going to continue now.

Even though right now the company still has margins that are less than half of Netflix, they're still moving them upwards, which is positive movement for Spotify. I still view this company positively as well. It has traded up a lot. The market cap has grown a lot,

but I still think Spotify has more to go now. Next up, we have news of Apple's next big device. This is the AI wall tablet. And Mark Gurman goes over this

new device here. So Apple's next big device is a smart home command center, a smart home panel, something you might stick on your wall like a security system from ADT, something you may put on your desk, something that you can use to control your locks, your lights, your your sprinklers, anything that's in your home that's connected to home Kit or Matter. That's the new smart home system that works across Apple, Amazon, and Google devices.

It'll have FaceTime, it'll have audio and video intercoms for use across your home. If you have multiple things like this, you'll be able to tap into Apple Music to control the music playback on your speakers throughout the home. So it's basically a command Center for everything you might want to do in your house. Anything you might want to control in your house, there's going to be a home security element to it, a content consumption element to it.

And this is something that can drive Apple hardware sales, but also Apple services sales and sets the stage for further entrance from Apple into the home. So we have the description there a command Center for your home and apparently Apple's looking to launch this as early as May of next year. Now when I when I hear this, I

think it's cool. I think that this might be used by a handful of people, control their devices, have a nice little tablet on your wall that has, you know, you can turn on your your lights and your lock your doors, sprinklers, all that. That could be cool. But this isn't going to be a game changer. It's just not something that's going to game change Apple. And the unfortunate truth is, if you're an Apple investor at this point, there's nothing they're ever going to do that's better

than the iPhone. And really starting to believe that there's just nothing that will beat the iPhone as a standalone device. Apple's moving into different categories where they know they're never going to make as much money as they did with the iPhone. Now, hopefully this could enhance their services business a little, but even then, I think it's going to have minimal impact. Now, we've heard stories over

the past couple of years that Temu and Sheen are both competitors to Amazon and Amazon is very threatened because of these companies. When I looked at the numbers, I didn't see that threat showing up in the US. But regardless, at least Amazon considers them a threat and they're they're adjusting to them. Amazon has debuted a discount store with everything under $20 to take on TAMU and Sheen, the Amazon Hall storefront.

So it's called Amazon Hall, is accessible through the company's mobile app and promises crazy low prices on a plethora of goods. Shoppers can buy $1.00 eyelash curlers and oven gloves or a $3 nail dryer. The company is offering free shipping on orders over $25 or $4.00 on shipping for orders below that threshold. So this is basically the opposite of what Amazon normally

does. Normally you have their Prime membership, you have free shipping, but you don't have this super cheap Chinese prices for these low quality, low priced items. That's something that Tamu and Qin really came into the US and they shipped directly from China over to the US. It took weeks to get your items, but it appealed to people that wanted the cheapest prices possible. Now, this article from CNBC says that Amazon is betting shoppers will wait longer for products in

exchange for rock bottom prices. This isn't something that they're betting on. There's no gamble here. Amazon has simply looked at what Tamu's done. Tamu's already proven that there is a big group of customers that are willing to wait a lot longer, a couple weeks for product if they can get it at a lower price. So Amazon's not betting on anything. This isn't a gamble. This business model has already been proven by Chinese competitors. What Amazon's doing here is copying them.

They're copying Chinese competitors like Tamu, they're copying the business strategy, and they're using their massive distribution and network to put it in their app that everyone already has downloaded and they already have all your information. So the transition from shopping on Amazon.com, their normal website, shopping for normal products, or shopping on Amazon Hall is virtually seamless. There's no different flipping from app to app.

It's right in your Amazon app. In this development further follows the blueprint of Amazon where they compete with everyone from every part of the world. They try attack every business everywhere. It is the most capitalistic competitive business I think that exists on earth. So it'll be interesting to see how Amazon Hull does. I'm guessing that even if Amazon Hull negates or slows down the growth of TAMU, they'll consider it a success.

Now finally, tomorrow morning we have Disney reporting their earnings. If we look at the weekly calendar here, we can see a number of familiar companies. This is the earnings calendar on Qualtrim. If you haven't tried it out, it's a new feature released to everyone right now, but if we click on Disney right here, click on the logo, it brings up their history of their earnings and their revenue. The red is when they've missed, the blue is when they've beat their earnings estimates by

analysts. And we can see that on the earnings per share, most of the time they beat. In fact, they're on a win streak here. We have around 7 different earnings reports, around 2 years of constantly beating on their earnings per share estimate. If I had a guess, I think that streak is going to continue. We've seen strength from Netflix. We see strength internationally. I think Disney's going to do

well on their subscriber count. They lost subscribers internationally on Disney Plus last quarter. So that's something to watch. We'll see if they can reverse that. But overall, I really think they're going to be on their earnings per share. Now when we flip over to the revenue here, this is where it can get a little bit dicey. They're projecting or at least the analysts estimates right now are for $22.44 billion. So it's going to be right around last quarter, 1/4 before.

But we look at their history with their revenue and they miss around half the time. So this one is a toss up. Statistically, Disney has around a 50% chance of missing the revenue. Tom Rogers is someone that has been overall correct on the streaming world. He's predicted that Netflix has won this battle a long time period ago. But he also says that Disney's not out of this fight yet. Disney still may turn out to be

a winner in this category. Well, just to set the table a little bit, Disney is number one in terms of viewership overall when you aggregate it streaming and it's traditional DTV services. So in a position to show some leadership here in terms of engagement.

Having said that, it's hard to talk about Disney without talking about Netflix, and Netflix enterprise value now is actually bigger than Disney, Warner, Paramount and Fox combined just to show what the traditional TV world is up against in terms of Netflix growth. That's just incredible. Netflix is bigger than basically all of their competitors combined. In fact, all of their top competitors combined. I've been saying this for a while as well.

Netflix is no longer really competing with Paramount or Max or even Disney. I think their true competitor is now Amazon. I really think that they look at Amazon and YouTube as their primary competitors. I think they've kind of looked past Disney. I think they've really, they've fought that battle. They beat them. They're on to Amazon and YouTube looking at them as the primary threats. Netflix free cash flow is presumably going to surpass

Disney's next year. But the thing that I'm impressed with with Disney is they've gotten their streaming revenues up to about 2/3 of Netflix. And last quarter their streaming revenue was about equivalent to what their traditional linear television revenues are. No one else among the traditional media companies have have done that. So they're getting some revenue scale.

The big question that everybody's going to be focused on is, yes, they've established their streaming, yes, it's scaling, but the big question is, can it be as profitable as their traditional television business was? That's a question of margins and the margins on the streaming business have a long way to go. So Disney has a lot of engagement, but a lot of their engagement still on cable TV, which is thinking overtime. Some of it's on the streaming,

which is growing overtime. And they're in that battle where they have to grow the streaming to be more profitable than their legacy cable business, which is very difficult to do. Ultimately, I think that Disney's an OK bet. I think they will become a big streaming player. I think streaming is a very profitable thing if you're at scale, Scale's the most important thing. And I think that Disney's one of the companies that can reach scale on this specific earnings report tomorrow.

My guess is that they'll be on their earnings per share estimate. And I think there's around a 60% chance they'll beat on their revenue as well. But I'd say the revenue's a bit more shaky. I think they're going to show good subscriber gain growth internationally and in the US. That's a question. So that one's a little bit of a toss up, but we saw what Netflix did and Disney is following the same blueprint. Now, of course, I think Netflix is still a better bet.

It's still the one that I have all my money in, but I won't count Disney out just yet. That's all for this episode. Hope you enjoyed. See you in the next one.